Established in 2007, as a Broad-Based Black Economic Empowerment (BBBEE) trading company in the South African oil market, Makwande Energy Trading is a crude oil and products trading company based in Johannesburg, South Africa. The company differentiates itself with a strong knowledge of the energy market.
Makwande is a Nguni word, which means, “let there be growth”. As the name implies, the company is committed to Growth, Service Excellence, Innovation and Strategic Partnerships. The need to transform and improve the distribution of oil and gas products led to the establishment of Makwande Supply and Distribution, in 2009, specializing in the transportation of fuel by road tankers.
Makwande Energy Trading was established by Nona Chili, a woman who has built a name for herself and a successful company in the downstream sector of the oil and gas industry.
Globally, the oil and gas industry is still largely male-dominated as statistics show that only 20% of the workforce in the oil and gas industry is female. Therefore, in an exclusive interview with African Leadership magazine’s Ehis Ayere, Nona Chili shared her experiences and challenges in building an Oil and Gas Company in South Africa, as well as her efforts in community development. Excerpts.
You come from a very humble background. What it was like growing up here in South Africa.
I grew in Cape Town, even though I am now in Johannesburg. At an early age, I, unfortunately, lost both of my parents. I got bursaries to take me through school and ended up with a Masters in Economics. The Masters in Economics was not my core interest initially; my core interest was Medical Psychology, trying to look into the environment in the township to help other kids who might find themselves in the same situation as I was. So that they do not give up; there is life tomorrow.
In doing Psychology in Economics at the university, I got high marks and Economics by default became an interesting subject. From there, I started working with First National Bank as a Foreign Exchange Trader. From the Bank, I joined the state-owned oil company (Petro SA) and I was on the Forex side before I moved to the oil department.
While in many African countries, far more boys attend school than girls. It is remarkable to note that primary school enrolment rates are roughly equal in South Africa; from 2008-2012, the primary school enrolment rate for boys was 89.7 per cent; for girls, it was 90.9%. However, reports show that all girls are also at a disadvantage in attaining quality education because of the patriarchal nature of South African society; and black girls are at a severe disadvantage compared to white girls in receiving a quality education. What are some of your experiences, while growing up in South Africa as a girl at that time you were schooling?
I think the challenge is as you have already mentioned – the patriarchal approach. We as women are taken as people that are supposed to be in the kitchen, cooking and cleaning. And so it becomes a stereotype. I am not different from those women that grew up in those environments; it was even worse when I was left on my own. It becomes more of a stereotype, but it does not stop you as a woman or a young lady to try and achieve your dreams, because there is nothing that stops from going forward. It is just a perception. It is just a stereotype, but no one stopped me and said don’t go ahead; don’t do this. Limitation is a thing of the mind most of the time. In fact, females are stopped in terms of getting finance. Let’s say you have got finance for your business, nothing stops you from doing anything.
Do you think the African society needs to do much more to empower the girl-child?
Definitely, because you empower a woman, you empower the nation. As a woman, you look at your neighbour, and then your neighbour’s child cannot starve when you as a woman, are next door. But when it comes to men, they will go and play golf. They will see the need, but later on, with more women empowered out there, you will see a difference in our society.
You started your career in 1992 at First National Bank as a Foreign Exchange Trader and gradually or should I say strategically joined into the oil and gas industry. Kindly share with us your career journey and some of your experiences along the line?
I started with the Bank as a Foreign Exchange Trader. In a South African context, it is beyond male or female. You still have the issue of the colour, black and white, because you find that there were few black people, if any, in those sectors. So, that is the first challenge. But then if you look around and see that you have got the same qualification as everybody; that is, you are as competent as everyone else; then you can take the issue of white or blackout of your mind, and then perform just like every other person. Then, in terms of moving to the oil industry, I joined the State Oil Group, as a Forex trader. And then, there was an opening on the oil side of the group, and then there was a transformation in the country; so to me, it was like, why not? SO I joined the oil division, and then, the rest is history. Our perception and mindset are what limit us. You look around and see that it is just men; already, you are just discouraged. I remember when I joined First National Bank, I did not have pant trousers, then I look at around, it is easy for me to be identified around here, first, you just change your perception, not that you want to be like them, you are still yourself. Then I started buying suits as well, so there is no difference at all. But in terms of support, what I have learnt is what I was taught by men. They are supportive. They will help; it is just that you have to reach out for help and they will help you.
Recent statistics show that the youth unemployment rate in South Africa increased to 54.70% in the fourth quarter of 2018 from 52.80 per cent in the third quarter of 2018. Let juxtapose the present and past South African economy; what was the situation of the South African economy during the time you left school in terms of employment for youths? Was it difficult for you getting your first job?
Well, it was difficult to even then. I think with the situation of South Africa, before 1994, it was difficult. Even if you qualify for a position, because of your colour you may not get the job. So, to me, it was kind of similar. Yes, now we have equal opportunities, but the economy is not right. It is putting us in a state of unemployment. What I can say to you, is don’t stop studying because you are discouraged nu unemployment because when opportunities come, they need to find you ready and prepared. So, continue but think about the situation around, continue to study, so that when the opportunity comes, you are ready.
As an employer of labour, what is your take on addressing youth unemployment in the continent?
We can start with internship, skills transfer to the younger generation. It may not give them real jobs, but it gives them an opportunity because with that you can pick up a talent. You find out that your labour force is in their mid-50’s and upwards, so you need the integration. So while you still have the senior people within your organisations, you bring in the interns and it gives them the opportunity to find out about their core speciality. Without giving out those opportunities for internship, you find out that if you go out of university or a high school, and then you look for a job, you find out that they are looking for experience. Where do you get that experience from? So, those internships which the private sector players are driving for in South Africa because it gives points in terms of your BEE-certificate as they are empowering youths. To me, it is the talent, because you can take out the best talent in a team which you can absorb, then you are creating a new labour force of people who are hungry to learn and prosper and it gives them an opportunity to take care of themselves.
The oil industry is still predominantly a Boys Club. Globally, only 20% of the workforce in the oil and gas industry is female. You have been in this sector and also in the finance industry which is also somewhat male-dominated. What is your experience?
I would not find the individuals that would put you there. But identify in the group, those who are really supportive and are on your side. And even those who put you down during the meetings, because they do that sometimes, especially if you come up with good ideas. On my part, I don’t take it out with the person during the meeting, but I will make sure I have a discussion with that individual. And you find out that in the next meeting, the conversation is different. So, don’t sit down and feel disappointed. Identify the people that like to pull you down, then deal with them one-on-one. It makes you understand why the person is behaving that way. If you try to find out in a forum, then you give that person the platform to humiliate you more.
So, women should not be that emotional?
I know it is difficult to do. But you need to learn. If it is a personal attack, you still respond based on the topic on the table. Don’t respond to the person on a personal attack. For example, in the case of a driver, the driver looks at you; you own the company, he is older than you, but you are the CEO of the company, and then, they will say to you, “No, madam, I have been doing this job for the past 25 years, do not tell me anything, you do not know anything about this job”. They like to say that in a group. You deal with the situation more objectively and try to push emotions aside. You can deal with the emotions, later on. You just tell the driver to stay behind and you deal with him one on one. By the next time, he will be the one to say, “guys, let’s support Nona”. People feel more empowered and strong when they are in a group, but when you engage them one-on-one; then, they are more human. Then you say, we are working on the same goal, there is no need for you to attack me because we are all supporting the company. You need to work for your kids; I need to work for my kids. I need you as an employee because without you I cannot function, you also need me as an employer to create the opportunities, because, without the company, you will not have a job. So, it is 50-50.
In 2007, you started Makwande Energy Trading and in 2009, you diversified into logistics through Makwande Supply and Distribution. In our previous interview with you, you stated that the transformation policies in the country that inspired you to go the entrepreneur route. What are these transformational policies?
After 1994 in South Africa, following the democratic change, the government came up with BEE empowerment; the economy became inclusive, including the previously disadvantaged communities in the economic mainstream. Therefore, we found out that there were procurement requirements, transformation requirements. They don’t give you an entitlement or freebie, but you still need to do your homework. And then, in the course of it, it kind of gives us an opportunity, a platform, to be part of the economic mainstream. But you still needed to do your homework.
How would you describe your journey with Makwande over the years, vis-à-vis where the giant strides of the company?
The journey has been a roller-coaster, with ups and downs. We have gone through many difficulties that a small oil and gas company would go through- be it financial or opportunity in terms of people, not being sure people are able to do what they are supposed to do. So you have to multiply your efforts in terms of making sure your counterparts and stakeholders are really confident. So, it is not an easy journey. It is on-going. It doesn’t end. Each day has its own dynamics, but it is how you respond to those dynamics that makes the difference. Then I will say also the delayed financial gratification; you should earn a salary. Do not look at the money that comes in in pieces as something you should spend. If you want to grow the company, reinvest back into the company.
So, that is what you have been doing?
Yes. We reinvest back into the company and delay financial gratification. Time will come really, when you will say, let me reward myself. But other than that, you need to reinvest back into the company and the people.
There are major players in the industry who have huge capacity in doing what you do. How have you been able to compete with them? Or rather, how are you able to sustain Makwande?
I will say in terms of sustainability, the oil majors are our partners because we supply them. We sell products to them. But in between, we buy from them on the wholesale and retail and sell to other parties. So, it’s a strategic company and because we are comparatively small, we have a close relationship with our clients. We know what they want and what they don’t want. And therefore, you try and strive to give them the best service ever. Turnaround time, in terms of assisting a client, is quicker, because we are small compared to them. Even if you can’t compete on pricing, but you look at other avenues you can compete.
Access to finance is the biggest challenge to entrepreneurs in Africa. The challenge of access to funding is more critical for women. The Government’s 2015 report on the status of women in South African economy, noted the findings that only 2.9 per cent of women entrepreneurs received assistance from a commercial bank in 2009, which has led a large proportion of adult women in South Africa to rely heavily on savings circles, government grants, and borrowing from money lenders. Was access to financing a challenge at the early stage of your entrepreneurial journey?
When it comes to oil, you are working with international banks that know the industry very well. So, if you are able to structure your financial transactions and you are able to demonstrate that there is no exposure; we find it that the international banks at the time were the ones that were far more advanced in terms of financing us than the local banks. So, the advantage of having an international bank at the beginning supporting us kind of assisted us. Locally, they look at your balance sheet that you have got nothing. And then, how I do I finance a 7 million transaction on someone who has got nothing. So, international banks are far more advanced in supporting commodity financing. As soon as you start working with the international banks, then, you start to attract the local ones. They will be the ones to ask what they can do to participate as well. So that helped as well.
When it came to trucks financing, I will not say it is women-owned companies, but start-ups that have the problem. But in that, you will find out that the manufacturers understand the business more than the financial institutions. The financial institutions will look at you and doubt if they can give you 4-million Rands, for instance, for petroleum trucks. But the OEMs have been in the industry for years. They know the business and they know that the trucks will be running; they will take the risk of financing you. So, you find ways and means of going around the challenges. The minute they do that, then you find that two, three years down the line, you begin to attract more financing to yourself. But make sure that whatever you do, you do it perfectly and efficiently. I think how you manage your business and financing in the early days is very important.
What is your take on this and what are your secrets and nuggets for success?
It is difficult to say that it is a secret. You need to work hard. It is important to be hands-on. You can’t have a business and leave it there for other people to handle. You and the company name are the same. There is an operational risk involved. You can let things run without you being involved. So, you work, hands-on, you double your efforts. But if you leave your job, you travel all over, you will find challenges. But if you are involved, because of the market dynamics, you should be able to you look for some form of diversification. For us, we started trading and then we realised that if this is our core business, I can tell you that in the next five years we will be out of business because it is the same market environment. There are many players, local and international. That was why we diversified into transport. The start-up market should assist you in doing the business, and then in two years, you should start looking around, for what else you can do to supplement your business.
Please tell us about your company’s commitment to HSE in terms of operations.
HSE, when it comes to the petroleum industry, is our bread and butter. There is no way you can avoid HSE. 89% of your day to day activities involve HSE. You are carrying a product that is hazardous that affect the people in the case of an accident. We do not compromise on that. We have training interventions. We have tool-box talk to remind people. Even if it is a small incident, we talk about it and discussing to increase awareness. So, it reduces the chances of recurring incidents. Then, lesser incidents you have, the better is your insurance premium. It is about a culture of safety.
We understand that your trucks have drive cam cameras as additional support to (OBC) and fatigue management system that evaluates and test the level of driver fatigue level on the road. Is this a unique feature of Makwande?
I will say the majority of the industry players have these features, but Makwande’s own is quite different. We have a tracking system that is monitoring the speed and all that. We have a tracking team that works round the clock. We have a fatigue management system that quickly sends email and SMS to us. So we have all these systems to assist us as we cannot do everything as human beings. But the system immediately sends an email or SMS to everybody that is loaded and then to me, when there is any danger. And when the drivers stop somewhere, then we call the driver, but we don’t call them on the cell phones, we have communicators on the trucks. So that if there is anything, the driver is not compromised using a cell phone, he just presses a button.
What are the future plans of Makwande?
It is just an on-going effort and we look for opportunities. I have got a business development group, headed by my Executive Director. We have sessions in looking at what we can do in the market. For example, we have a storage facility I will take you to in Benoni, which is an alternative to us. You know I travel a lot, especially to your country, Nigeria, for crude oil, working with the local content policy in Nigeria. So to me, we look at the opportunities in other places, even in neighbouring countries. Even in Nigeria, people work very hard. I am quite proud to see people that have achieved a lot. Your planes are owned by indigenous Nigerians, which is something we do not have here. So by travelling and meeting with other people, you see opportunities and we try to replicate the same working with other partners.
What is your take on the African Continental Free Trade Agreement (AfCTA)?
I am one of those people that support it. As a continent, we have got a lot but we really do not know how to advantage what we have. So, to me, intra-Africa trade ought to be where it should start in terms of what we have. We have learnt from the West, but what we can we do locally in the continent can enrich us and make us different. There is a lot we can do together.
There are some issues you addressed before, skills development and job creation. How can you quantify Makwade’s contribution to these areas?
Most of the people that are here in Makwande, even interns, are people that are not from the oil industry. So, the knowledge that I have, I impact on them and I find them very appreciative. When you go to the oil majors, you will find that for certain divisions they already have people. At Makwande, it is possible to go into areas where you are not exposed to. And knowing the background of the individual, where the person is coming from previously disadvantaged communities, I used this as a platform to integrate most of the persons into the organisation. Internship becomes a plus; we have one intern here in the head office. You will see more interns when we go to Alrode. You see people who come here without knowing what they are here for and we train them and they become senior managers. So, for me, that is an achievement.
Please tell us more about your various CSR programmes and contributions to community development.
When it comes to CSR, it is giving back to the community. We identify homes; for example, we have an orphanage home. We have got Girls and Boys Town, where they keep abused or abandoned children and they are in need of money to subsidise the education of those children. We have children who are in a situation that is not as a result of their doing, and they have talent in them. So we contribute. We will like to do more. So far, we are working closely with two and we have others that we are doing outside these two. So we make sure that we give them support. I always say that your environment should not define what you should be, or who you become; so if we give them support so that the kids are able to go to school; we might have a future.
What about the scholarships?
When it comes to bursaries, we look, talk to people and ask if they have serious kids that you have in your closer community. There was a girl who was staying with her grandmother who was earning a pension. The grandmother passed away. That child is so serious; you will see her tomorrow. Those are the people we look for. Without assistance, the person is going nowhere. We identify kids that are in serious cases.
How do you balance your family and work life?
I think it is all about planning and engaging. If your kids know you are busy, either you come back home early, you help them do homework and make it a rule that by 8 pm, they go to bed. Then you have your little corner. After 8 pm, you continue your work. And then, you set aside Saturdays; you know that Saturdays, you don’t anything that is work-related. It becomes a family day; you take them out to see a movie and all that.
Who are your mentors in the industry?
There are so many people who have impacted my life. If I mention a few, it might not be good as I may be leaving some people out. So I find myself surrounded by people. If you don’t reach out to people, they won’t come to you if you needed some help. My mother was one of these people. She didn’t go to school, but she has a lot of strength which inspired us.
Quote: Limitation is a thing of the mind most of the time.